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The United Arab Emirates (UAE) is starting to accept license applications from companies offering crypto services.
UAE's Securities and Commodities Authority (SCA) made the announcement on Monday, which follows the UAE Council of Ministers' decision last year to regulate the country's crypto industry.
Virtual asset service providers must apply for approval with the SCA, except for those already licensed in the UAE's financial-free zones. Dubai and Abu Dhabi already have licensing systems for crypto firms.
Those looking to operate in Dubai must also obtain a license from the Virtual Assets Regulatory Authority (VARA) as well as the SCA.
Companies must demonstrate "operational efficiency and flexibility" and meet operational standards to be granted SCA authorisation.
"A person wishing to engage in virtual-asset activities shall have headquarters in the State to conduct his business, according to one of the legal forms approved by the local authorities concerned with commercial licenses," the regulation dictates.
Middle East's crypto warmth
Crypto firms have been looking towards the Middle East for more favourable regulation frameworks.
Most recently, Bybit, the world’s fourth largest crypto exchange by volume, joined a new influx of crypto firms into Dubai with the opening of its global headquarters in the emirate.
Last month, Crypto.com was granted the second stage of licensing in Dubai with a preparatory license. The full license process involves three stages. Crypto.com received the first provisional permit in June last year. Its latest preparty license is the second stage.
Nonetheless, Dubai is still remaining cautious. Earlier this month, officials at VARA asked Binance to provide more information about its company structure, governance and auditing.
International companies seeking digital asset licenses from VARA are also being requested the same information.
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